If you are interested in buying a home, chances are you’ve experienced the ambiguity of how much you will need for a down payment. Perhaps you know how much you will need to pay, but are troubled by how to save the dough.
Here are a few tips from some of our favored experts on how to save for a down payment.
Figure out exactly how much you need to save
Work with your mortgage lender to determine exactly how much you’ll need to save for your down payment. There are a variety of factors at play, and a lender will help you understand how much of a mortgage you will qualify for—which will then determine how much you will need for a down payment. A professional will help you calculate how much to set aside based on your income, debts and expenses.
Clear any credit card debt
Lowering the amount of money you’re dishing out to others helps you build more savings. Credit card debts are a particularly unfortunate thorn in your savings accounts side as the high interest rates can take a toll overtime. Rather than paying your monthly minimums, start paying greater sums to your credit card debt to clear it faster. The sooner you clear these debts, the more money you can set aside toward your down payment savings.
Make your money work smarter
Boost your hard-earned dollars by exploring an alternative to a regular savings account. Regular savings accounts earn little to no interest over time, whereas alternative money market accounts or a certificate deposit (CD) will accrue more interest over time. Be sure to check with a financial planner at your bank on which type of account is best for your needs.
Add savings to your budget
Set up a savings plan and stick to it. Make quarterly, monthly or weekly goals that are realistic and achievable. You may need to find ways to earn extra income, or perhaps cut back on expenses or find items to sell to help you reach your goals.
Tap your retirement or IRA accounts
Are you familiar with the details of your retirement accounts? In some cases, your plan may allow you to borrow money from your funds to put toward a new home. Also, if you are a first-time homebuyer you could potentially withdraw money from your IRA account.
For more information on how to save for your down payment, reach out to a member of our team!
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Hearndon Construction, Inc. |
Builder reserves the right to change prices, plans, components, specifications, and to withdraw any plan without notice. All illustrations are artists' concepts and accuracy is not guaranteed. Extra-cost options may be shown in models or in illustrations. Individual homes may differ from the models or from each other depending on field conditions.